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Bear market, bull market, bearish, bullish

In investing, a bull market is one in which trends are upward and most investors are optimistic. A bear market is the opposite—a time of downward trends and pessimism among most investors. The corresponding adjectives, bearish and bullish, describe either market conditions (falling or rising, respectively) or investors’ attitudes toward the market or certain investments.

If you have trouble remembering which is which, think of the Charging Bull statue (the link goes to an image) on Wall Street, at the symbolic center of the U.S. financial industry. We usually erect statues to honor good things. On Wall Street, the bull is good.

Of course, while bullish is usually good and bearish usually bad, this is not true for everyone. For investors who short the market, for instance, bearishness can mean big gains.

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The terms have been around since the late 19th century, but their exact origins are unknown. They make metaphorical sense—bulls charge, and bears hibernate—but we can’t say whether the terms were originally metaphors.

Examples

Then, the Dow fell almost 20%, which would have marked a new bear market. [Wall Street Journal]

During the bull market of the 1990s it seemed any fool could make money. [Independent]

Are famously bearish observers beginning to shed their crankiness in the face of improving U.S. economic data? [Globe and Mail]

In a bullish assessment of gold prices, Mr Robinson said the upward trajectory of the past decade would continue apace. [Sydney Morning Herald]

Comments

“Bull and Bear” are not really “good” and “bad” — just “up” and “down” in the stock market. For a person who trades by selling short and buying long, a bear market is just dandy and an unexpected bull market could be disastrous. The terminology really just points to the attitude of traders toward trends in stock prices, and like much Wall Street or financial descriptive lingo it is characteristically evasive metaphor.

I was taught that the phrases came from the manner in which the respective animals would eviscerate a human being. A bull will charge and fling a person upward with its horns, while a bear will rear up and bring its paws down upon a person.